Fiat and Tata Partner in India

MUMBAI, India — Italian auto giant Fiat will team with India's Tata Motors in an $874 million joint venture to build compact vehicles for Indian consumers and for export markets.

The venture will use Fiat's assembly facility in Ranjangaon, with assembly of newly designed Fiat and Tata vehicles to begin in early 2008. The plant will have the capacity to build 100,000 vehicles and 200,000 engines a year. The engines will include a small diesel for the Indian market.

The Fiat models for India will include the company's popular Grande Punto hatchback and the Linea sedan. The Fiat Palio already is being assembled at the plant.

Tata is developing several new models, including a low-priced compact intended to sell in India for around $4,000. It did not specify which models will be produced at the plant with Fiat.

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